Is it cheaper to extend or to move?

Stamp duty land tax in England, as it stands today

Stamp duty land tax applies in England and Northern Ireland. Wales has land transaction tax and Scotland has land and buildings transaction tax, with different rates.

So much as does not exceed £125,000: 0%. So much as exceeds £125,000 but does not exceed £250,000: 2%. So much as exceeds £250,000 but does not exceed £925,000: 5%. So much as exceeds £925,000 but does not exceed £1,500,000: 10%. The remainder (if any): 12%.

These rates apply where the home you buy will be the only residential property you own. First-time buyers pay nothing up to £300,000 and 5% from £300,001 to £500,000, with no relief above £500,000. If you complete your purchase before your sale, you usually pay 5% on top of these rates because you own two homes on that day. HMRC's guidance on replacing a main residence explains when that extra can be avoided or reclaimed; the time limit it uses is 36 months.

A worked example of the cost of moving

The assumptions: you sell a house in England for £400,000 and buy one for £500,000 that gives you the space you need. You are not a first-time buyer, and the sale and purchase complete on the same day. The fees are national published averages, not quotes.

Mortgage arrangement fees, which HomeOwners Alliance puts at up to £1,500 (24 September 2026), are left out because they depend on the deal. None of this money adds to the value of the house you end up in.

Setting it against the cost of extending

Extending has its own costs: the build, the fees, VAT at 20% on work to an existing home, a contingency, and sometimes the cost of living elsewhere during the works. Some of that money comes back as value. The structure of the cost is in what a cost plan contains, the fees in design and professional fees and the VAT in VAT on building work.

A fair comparison looks at what each route leaves you out of pocket once the house is valued:

• Moving: you pay the £100,000 price difference and the £23,819 to £26,469 of tax and fees. The price difference is in the new house. The tax and fees are gone.
• Extending: you pay the full cost of the project. The value it adds is in the house. The rest is gone.

So extending is cheaper when the project's full cost, minus the value it adds, is less than the moving costs.

Carrying the example on: suppose the £400,000 house is a two-bedroom semi-detached and the extension adds a third bedroom. Nationwide's October 2025 research puts the average value added by that change at 14%, or £56,000 here. Extending is then the cheaper route if the whole project costs less than £56,000 plus the moving costs: about £79,800 to £82,500. Above that, moving costs less in money terms. How reliable that 14% is, and why the price per square metre shortcut overstates it, is in does an extension add value.

What the numbers leave out

Time is the largest omission. An extension needs design, permissions and a build before you have the space, as set out in how long does an extension take. Living through building work has a cost that no table captures. Moving changes the location, the school run and the neighbours. Extending keeps them, but is limited by the plot, planning and the ceiling price of the street.

What this means for you

Run the example with your own figures: an agent's valuation of your current home, the price of the home you would move to, the stamp duty from HMRC's calculator, and an early cost range for the extension. If the extension's likely cost sits close to the break-even figure, the uncertainty in the cost plan matters more than the averages.